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Is the Ballooning Billing Rate Ready to Pop?
Short of a seismic financial shock, hefty law firm billing rate increases are seemingly here to stay, much to the chagrin of clients and their general counsel. But that’s not to say that market conditions aren’t evolving to challenge the status quo of large rate increases — and in the words of one consultant advising corporate law departments, you don’t know you’re in a bubble until it pops.
Law firms have gone on the record saying that clients and the market are able to bear increases in legal spending, explaining why firms are continuing to raise rates above inflation or — as some in-house counsel claimed — above increases in corporate profitability. But some consultants and clients are beginning to raise some concerns about the current pricing model.
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